The Gibson Energy Inc. (TSE:GEI) Analysts Have Been Trimming Their Sales Forecasts
One thing we could say about the analysts on Gibson Energy Inc. (TSE:GEI) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. This report focused on revenue estimates, and it looks as though the consensus view of the business has become substantially more conservative.
Following the downgrade, the consensus from eight analysts covering Gibson Energy is for revenues of CA$9.4b in 2024, implying an uneasy 12% decline in sales compared to the last 12 months. Statutory earnings per share are presumed to ascend 16% to CA$1.62. Prior to this update, the analysts had been forecasting revenues of CA$11b and earnings per share (EPS) of CA$1.71 in 2024. Indeed, we can see that analyst sentiment has declined measurably after the new consensus came out, with a substantial drop in revenue estimates and a small dip in EPS estimates to boot.
Check out our latest analysis for Gibson Energy
Analysts made no major changes to their price target of CA$25.04, suggesting the downgrades are not expected to have a long-term impact on Gibson Energy's valuation.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 10% by the end of 2024. This indicates a significant reduction from annual growth of 11% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.0% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Gibson Energy is expected to lag the wider industry.
The Bottom Line
The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Gibson Energy's revenues are expected to grow slower than the wider market. Overall, given the drastic downgrade to next year's forecasts, we'd be feeling a little more wary of Gibson Energy going forwards.
After a downgrade like this, it's pretty clear that previous forecasts were too optimistic. What's more, we've spotted several possible issues with Gibson Energy's business, like dilutive stock issuance over the past year. Learn more, and discover the 2 other warning signs we've identified, for free on our platform here.
Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
